Friday, November 23, 2007

MIT Energy Conference lands renowned clean energy investor John Doerr as keynote!

The directors of the MIT Energy Conference announced this week that John Doerr, Partner at Kleiner Perkins Caufield & Byers - one of the world's most famous and successful venture capital firms, has agreed to keynote this year's conference, to be held April 11-12, 2008. Congrats to the MIT Energy Conference Organizing Team on this huge win!

I couldn't be more excited about the Conference team's choice in having John Doerr as a keynote.

Doerr has emerged as a clean energy icon representing the new wave of capitalism-driven clean energy deployment that has taken the world by storm in the last few years. His impassioned plea for the need to deal with climate change at last year's TED conference in Monterey, CA (my home town) represented the mix of shrewd business acumen and emotional furvor that will be required to transform the global energy apparatus to a more sustainable one over the next 50-100 years to avoid political and/or environmental and/or economic catastrophe.

Kleiner Perkins has majorly committed to funding and supporting green technology development and currently has 10 publically-announced "clean energy" porfolio companies:

Local Firms in Their Portfolio:
- Great Point Energy - Coal-to-Gas
- Liluputian - Micro Fuel Cells (out of MIT)
- Mascoma - Cellulosic Ethanol (out of Dartmouth)

- Altarock: Geothermal (Seattle, WA)
- Altra Biofuels (Los Angeles) & Amyris Biotechnologies (Bay Area): Synthetic Biology for Biofuels
- Ausra: Solar Thermal (Bay Area)
- Bloom Energy: Regenerative Solid Oxide Fuel Cells (Bay Area)
- Miasole: CIGS Thin Film Solar (Bay Area)
- Verdiem: Software to Reduce "Vampire Loads" in PC usage (Seattle, WA)

Doerr will join Jim Rodgers, CEO of Duke Energy, to round out the MIT Energy Conference 2008 keynote line up. These two global clean energy leaders come from two opposite ends of the clean energy industry spectrum, with Rodgers being a progressive leader of one of the largest existing utilities in the U.S. and Doerr representing the nimble energy entrepreneurs and investors who hope to change the energy game. I believe they both will bring incredibly valuable perspectives to to the table: innovation and change will have to come from both the top-down and bottom-up in the energy industry to effect real progress toward reducing carbon emissions and environmental degradation associated with our energy usage.

Wednesday, November 14, 2007

9 MIT Energy Profs Granted Tenure.... 18% of Total

MIT Tech Talk announced this week that the MIT Corporation has recently granted tenure to 50 MIT professors.

By my count 9 out of the 50 can be considered "energy professors". This provides one data point indicating that ~20% of MIT profs can be considered to be working actively in energy. Note: Bolded profs have been involved with the MIT Energy Club.

Full Tenured Professors:
  • Bill Green (Chemical Engineering) - leader in computer simulation of reactive chemical processes - active in understanding catalytic reactions for hydrocarbon refining/conversion/upgrading
  • Jonas Peters (Chemistry) - design of new inorganic and organic nonmetallic transformations and the synthesis of novel ligands and transition metal complexes with applications in solar and solar-to-fuels
  • John Brisson II (Mechanical Engineering) - work on carbon sequestration
  • Rajeev Ram (EECS) - work on thermophotovoltaics

Other Energy Professors Receiving Tenure:

  • Vladimir Bulovic (EECS) - leader in molecular, nanostructured, and organic semiconductor electronics and optoelectronics - active in organic and organic/nanocrystal hybrid solar
  • Nicola Marzari (Materials Science) - leader in first-principles calculations of materials properties - active in hydrogen storage, catalysis, and other energy areas
  • David Perreault (EECS) - leader in power electronics
  • Senthil Todadri (Physics) - works on theory of high-temperature superconductors
  • John Fernandez (Architecture) - leader in the field of sustainable and resource-efficient buildings

Nice diversity of expertise represented here. I'm curious if this ~20% number is accurate.....

Friday, November 9, 2007

Discussing Energy Infrastructure with MIT ESD PhD student Jim McFarland...

Jim McFarland (please note the glamour shot), MIT PhD student in ESD, lead a very interesting discussion on "Energy Infrastructure from the Vantage Point of Carbon Capture and Sequestration" this past Wed in the MIT Energy Club Discussion Series.

The discussion focused much more on energy infrastructure than CCS, but that was just fine. Jim started out the session by handing out copies of an incredibly thorough mind map categorizing the energy field. I highly encourage people to get copies of this. Hopefully, Jim won't charge. :)

The session began with a discussion about what we even mean by "energy infrastructure"? It was easy for us all to agree that transmission lines, distribution lines, and fuel pipelines clearly represent infrastructure, but through the discussion I believe most of us came to agree that energy infrastructure also includes power plants, gas stations, as well as the human and knowledge capital required to keep the industry going.

The discussion ranged about a bit, but here are a few other highlights....

David Danielson posed the question of whether energy infrastructure is truly underinvested in right now, as is widely claimed, or not. This led to the question of what it is that limits/determines the amount of investment that is made in infrastructure. Rich Sears, MIT visitng scientist from Shell, succinctly answered this question: profit-seeking companies determine their infrastructure investments by 1.) determining how much capital they have to invest and 2.) what are the most profitable ways to invest that capital. Pretty simple. :)

There was an interesting discussion on the difficulty of siting power lines/pipelines. The key difficulty is gaining rights to build/cross over privately owned land. Important solutions discussed included 1.) compensating private land owners for the right to cross their land (a la what we have seen with wind turbines - Rich Sears quoted a farmer he had seen interviewed who had a relatively loud wind turbine on his land saying "Sounds like money to me.".) and 2.) creating positive public perception of the benefits of the project to the general public in the region where transmission/pipeline rights are needed. One student from Kansas pointed out that the coal and natural gas lobbies have been fighting it out in the newspapers trying to change public opinion one way and the other in terms of siting new coal or gas power generation facilities. Although it sounded from what she said that these companies had unfortunately resorted to fear-mongering and xenophobia, students in the discussion realized that public relations campaigns are critical for any project requiring siting. Ideally, this is done in a more honest spirit, educating the public about the true benefits of the project.

The CCS portion of the discussion was very interesting. It was discussed that plenty of enhanced oil recovery projects have been done for many years by the big oil companies. BP's recent cancellation of the Carson City EOR project was highlighted as an example of the difficulties inherent in building new energy infrastructure. It was stated by one attendee that the project failed because of PR campaign in southern CA by some environmental groups telling the public that there was a danger that CO2 from the project could flood the entire LA basin, asphixiating the whole town. This is clearly silly, but it killed the project.

It was pointed out that CCS demo projects should be done with the explicity purpose of demonstrating the viability of CCS and that they should be performed in the locations with the most suitable geologies, not necessarily where existing energy infrastructure and human capital are concentrated. This would allow for demonstrations and careful measurement/validation while mitigating the risk of having a CCS project shut down by negative public opinion.

On a personal note, I have been thinking a lot about public perception about different sources of energy. It has become clear to me that the general public perception is that CCS is not green or clean, with perhaps a bit more of a yellowish hue. How can the CCS folks change this image? Perhaps by co-siting all CCS demo projects with wind and solar projects.... They better, if they want to have even the possibility of building out CCS at the scale that will be required to make a dent in CO2 emissions going forward in the next 5, 10, 15 years.....

Tuesday, November 6, 2007

Former Chairman and CEO of ExxonMobil, Lee Raymond, speaks in the MIT Energy Initiative Colloqium

The MIT Energy Initiative brought Lee Raymond, former CEO/Chairman of ExxonMobil, to come speak to the MIT energy community about the recently published National Petroleum Council report "Facing the Hard Truths about Energy".

The format of the event was a "fireside chat" with MIT Institute Professor John Deutch peppering Lee Raymond with questions and then open audience Q&A.

John Deutch opened the session by expressing his pleasure that Lee Raymond has a PhD in Chemical Engineering. Very much in the spirit of Deutch's excellent MIT class, with Prof. Richard Lester, on "Applications of Technology in Energy and Environment". Deutch pushes in this class for the need for technologists to push their knowledge set into the practical to allow them to be industry, political, and thought leaders going forward.

Raymond opened by describing the history of the National Petroleum Council. The uninterested observer would just assume that it is an industry group like the American Petroleum Council. However, the audience learned a bit more.... the NPC was formed during WWII as an industry/gov't partnership to work to solve the strategic problem of ensuring U.S. oil supply. Now, the NPC is officially a federal advisory council that reports to the DOE, specifically to the Secretary of Energy, MIT's own Samuel Bodman currently. The NPC has previously published a report on Natural Gas. The current report was commissioned by the Secretary of Energy himself.

Raymond made opening points about the importance of large/long scales when thinking about solving energy problems. He pointed out that large scales are needed to "move the needle" in energy and that massive capital outlays over long time-scales are required to effect change in the energy industry.

Deutch's first question revolved around the prediction by the report that the world will produce and consume 120 million barrels per day (mbd) by 2030, the current number being ~80 mbd. Raymond responded that the resource is there and that the key question is whether we will be able to get at it: meaning will the required capital be made available, will policy and environmental limitations allow for it, and will the human capital be available to make it happen. He also pointed at that the wells currently accounting for the global production of 80 mbd are in production decline, so to get to 120 mbd by 2030 will required the addition of more like 60-70 mbd of new capacity, nearly equal to what we currently have! To me, doing what we have done so far in the history of oil once again, but in 23 years this time, seems daunting.

Another of Deutch's questions related to the important role that national oil companies (NOCs) in politically fragile countries play on the global oil scene. Raymond said that if the past predicts the future, he didn't have a lot of confidence that a lot of good things would be happening here. However, he pointed out, the fact that many of these countries rely nearly completely on oil income for their GDP would indicate that they will continue pumping, even through politically turbulent times (as long as this is possible!). Raymond emphasized the importance of the rule of law and transparency for allowing for a more efficient global oil industry to operate.

Raymond/Deutch also pointed out that ExxonMobil controlled ~80% of both production and reserves in 1973, whereas NOC's have about the same position now. An important trend to be aware of. Deutch wondered what the role of the multinational oil companies will be going forward with the NOC's playing such a prominent and growing role. Raymond stated that he believes that "best-in-class" multinationals will always have a place in the global oil industry, as NOC's have the need for capital, technology, and project management expertise that will reside in the multinationals for the foreseeable future. He also pointed out that the revenue difference for an oil field run "averagely" well versus the best run field means differences of $1B's per year, illustrating the core value of project management expertise.

Raymond was asked by Deutch to think like a startup guy for a moment and consider which technologies/problems in the energy arena are most exciting to him now. He pointed out subsurface characterization, "the ability to see into the earth", as one key area. He also pointed to the importance of flexible refining of crude oil: the ability to quickly characterize crude oil and optimally process it into refined products, as a very important area.

When asked by an audience member about the strategic importance of Antarctica for "Western friendly" oil resources, Raymond went straight to discussing deep water resources. He pointed out that we now can produce at 5000ft of water and explore at 10000ft. I believe he was trying to point out that deep water is one critical strategic reserve area for the West, as well as to emphasize the importance of technology development to open up West friendly reserves (opening up environmentally sensitive areas with delicate technology approaches?, increasing the resource base by being able to hit ultra-deep water?)

When asked about the importance of a variety of oil alternatives, Raymond pointed out the existence of a "false choice", meaning there is no either/or here but simply a need for as many market-viable solutions as possible. One very interesting point he made is that natural gas should not be used for power generation. It is just too valuable for the creation of high value energy products. He emphasized the logic of focusing much more on clean coal, making a low value product that is better suited to power generation an environmentally acceptable choice. Very interesting as the role of natural gas in the power section has grown like crazy in recent years.

He emphasized that one big surprise that came across to him as the NPC worked on the report was how difficult the infrastructure issues around biomass-energy are, that collection and transport of biomass and bio-energy products look very difficult from an infrastructure.

Raymond also emphasized the importance of energy in foreign policy. He noted that the U.S. is no longer the center of the energy universe, that the demand center of the universe has become the Far East, while the supply center is the Middle East (there was a time when the U.S. was the center of supply as well!)

Raymond has his hands tied a little when it comes to controversial topics, because he does not want to reflect poorly on the company he essentially built, ExxonMobil, with off-hand comments that get published far and wide in the media.

However, MIT's beloved John Deutch is another story (thank goodness!), and was not slow to mention the key geopolitical energy issues that are on everyone's minds, mentioning Iran, Venezuela, and Chinese dealings with certain African countries as key examples.

Raymond was asked - perhaps more told - by an audience member (an MIT alum and retired GE employee who had attended the Peak Oil Conference, referenced in Ed Carlevale's post below) that the age of cheap oil is over. Raymond had a nice quote in response, saying that "the age of cheap oil is over is a cheap comment". He pointed out that traditionally oil production costs have been in the single digits, while they are just now into the double digits. Even a doubling from current costs would put us in the $20's/barrel. My thoughts here: So is it fair to say that the era of cheap oil is over?? There is a limited resource availability, but that resource can still be produced at pretty low cost. So is there limited but relatively low production cost supply and increased demand results in high prices. We should remember that in contrast to the 1970's, the current spike in oil prices is much more a demand-side driven phenomenon than a supply-side issue.....

As a closing fun note, I was impressed to find out that Raymond completed his PhD in Chemical Engineering with a global chem eng rockstar prof in 3 years. Having taken 6.5 years myself, I am duly impressed.

All in all a very engaging and interesting discussion with one of the men who has formed the modern global energy landscape. I was impressed by Lee Raymond's cordiality and frankness.

Sunday, November 4, 2007

Energy Night a Success!

Unprecedented numbers flocked to the MIT Museum on October 12 to find the most cutting-edge MIT energy research, the hottest MIT energy start-ups, and the most dynamic MIT labs. They were not dissapointed as Energy Night at the MIT Museum exploded in its 3rd year running.

Energy Night is the MIT Energy Club’s premiere community building event for the fall semester. It was a huge success for the club, with over 40 presenters exhibiting their research and MIT-based businesses to over 1200 attendees.

MIT Museum’s new exhibition space provided ample room for attendees and presenters to mingle. Appetizers and a jazz band set the scene for an exchange of energy ideas and information. Fergus Hurly, a Co-Director of Energy Night mentioned, “One of the unique aspects of Energy Night is its ability to get MIT researchers to discuss their most recent breakthroughs with the wider MIT community.” At left Chris Evans from the MIT Engineering Systems Division explains his research on the future of transportation fuel.

Presenters included the Laboratory for Plasma Fusion and Science, the Environmentally Benign Manufacturing Lab, and the MIT affiliated Draper Labs. General Motor’s new plug-in hybrid vehicle, the Chevrolet Volt (right photo), highlighted the night as attendees received an up close view of the sports car before entering the Museum. Surprise guest, Craig Cornelius, Solar Programs Director at the Department of Energy also stopped in to see what the buzz was about.

A major goal of the Energy Night event is to encourage the greater energy community to meet each other and discuss ideas for new research areas and business opportunities. Albert Park, and Arthur Mak, two MIT students interested in developing a new carbon conversion technology, came to Energy Night to find new teammates. Arthur mentioned, “We are eager to connect with like-minded individuals and to educate ourselves on the technology landscape. We are looking forward to meeting talented innovators who can help our company going forward.” Similarly, the demand management company, EnerNOC, pitched their business with attendees, but also emphasized job opportunities within their growing company. Seph Skerritt, a second-year student at the MIT Sloan School of Management was pleased with the networking opportunities available through Energy Night, noting “Everywhere I turned there was someone with an incredible technology. I was highly impressed with the event."

Summing up the event, Jason Roeder, a Sloan second year, noted, “Energy Night truly exhibits the passion and excitement regarding energy at MIT. It has grown to be the capstone of the MIT Energy Club’s fall events.” MIT Energy Night is already scheduled for October 10, 2008.

First-Year Sloan students Jenny Kwan and Burt Lafountain mingling at Energy Night

Friday, November 2, 2007

Energy Lecture Series: Mark McVay from PowerAdvocate - TONS of energy infrastructure investment on the way, SUPPLY CHAIN very difficult...

Mark McVay, Senior VP of Sales & Marketing at PowerAdvocate, delivered a very compelling lecture in the MIT Energy Lecture Series last night. The lecture was so interesting that the Q&A session started about 20 minutes in and never stopped until the final bell!

From what I gathered, PowerAdvocate is a consulting firm that helps big electric power firms with supply chain, procurement, pricing et al. They are MAJORLY in demand these days as everyone and their mom is looking to build capacity, and in many cases, capacity in technologies with which they have no prior experience (i.e. wind). The huge capacity buildup is resulting in major supply chain problems, with gas turbines, wind turbines, and other essential power plant components having lead times as long as 3 years.

A few random thoughts/notes that I took are here, would love to hear other people's thoughts about the points raised in this great lecture:

GREEN SUPPLY CHAIN: An interesting thing brought up was that some utilities are working to have a "green" supply chain. This presents a very complex task and was a great opportunity for a firm like PowerAdvocate to provide help. This will probably be a very interesting space for some company to fill on the consumer side, i.e. Walmart....

WE NEED NEW BLOOD: The average age of people working in the electric power industry is 55. There are going to be a ton of new opportunities for younger folks to get into this industry and rise fast. Such a large amount of turnover may have a profound effect on the philosophy of the industry....

NO WIND TURBINES AVAILABLE: Mark pointed out that wind turbine suppliers are unable to promise availability of turbines for sale until 2011, and even for 2011 delivery are unwilling to quote a price.

MASSIVE CAPEX ON THE WAY IN UTILITY INDUSTRY: Utility capital expenditures in the fourth quarter of 2006 was $60B. Jim McFarland pointed out that there was a big overbuild of capacity in the 1970's, which has led utilities to underinvest for a number of years. We are seeing a huge boom of new capacity being planned to make up for this. Capex is: 30% generation, 30% distribution, 11% transmission, ...

CHINA: Going out to 2030, it is projected that China will add 800+ GW of electric capacity, slightly higher than expected for North America.

EFFECTS OF THE BOOM: Costs and lead times for projects are skyrocketing due to the poor state of the supply chain after years without many new projects being built.... the specialty fans requred for SO2 scrubbers have a lead time of 2 years currently. Commodity prices have risen 35%/year as well in recent years. This means that change in the sector will only come slowly and that electricity prices will inevitably rise in the short to mid term.

Jim Rodgers, CEO of Duke Energy and a keynote speaker at this year's MIT Energy Conference, predicts that the electric power industry will need to invest $900B in the next 15 years.

But how will this much capital be attracted unless the returns on investment are sufficiently high. I think this points to an inevitable need for significant electric power price increases going forward, regardless of what PUC's might hope for. Otherwise, the investment just won't come.

If prices go up to much, I am concerned that popular support for climate legislation may die on the vine.

How do we avoid such a situation??

Demand management was proposed as a possible solution that could come on much more rapidly potentially...... Other ideas???

Thursday, November 1, 2007

Is he talking about us?

Jim Kunstler and his brilliant blog -- Clusterfuck Nation -- took us to Houston last week for the Peak Oil Conference, nastily summarizing expert testimony from the likes of Robert Hirsch, Matt Simmons and Jeffrey Brown, who collectively predict an energy future for us that lies somewhere between Mad Max I and II.

And Houston, apparently, was the ideal setting for the nightmare to come ("It is hard to imagine a more horrifying urban construct than this anti-city in the malarial swamps just off the Gulf of Mexico.")

This week Kunstler is back to say a word about those optimistic souls in universities who see an energy crisis and think techie opportunity ("Assumptions").

For the full blistering effect, it's worth quoting at length:

When historians glance back at 2007 through the haze of their coal-fired stoves, they will mark this year as the onset of the Long Emergency – or whatever they choose to call the unraveling of industrial economies and the complex systems that constituted them. And if they retain any sense of humor – which is very likely since, as wise Sam Beckett once averred, nothing is funnier than unhappiness – they will chuckle at the assumptions that drove the doings and mental operations of those in charge back then (i.e. now).

The price of oil is up 53 percent over a year ago, creeping up now toward the mid-$90-range. The news media is still AWOL on the subject. (The New York Times has nothing about it on today’s front page.) The dollar is losing a penny a week against the Euro. In essence, the American standard of living is dropping like a sash weight. So far, a stunned public is stumbling into impoverishment drunk on Britney Spears video clips. If they ever do sober up, and get to a “…hey, wait a minute…” moment when they recognize the gulf between reality and the story told by leaders in government, business, education, and the media, it is liable to be a very ugly moment in US history.

One of the stupidest assumptions made by the educated salient of adults these days is that we are guaranteed a smooth transition between the cancerous hypertrophy of our current economic environment and the harsher conditions that we are barreling toward. The university profs and the tech sector worker bees are still absolutely confident that some hypothetical “they” will “come up with” magical rescue remedies for running the Happy Motoring system without gasoline... As I said, these are the educated denizens of the colleges. Imagine what the nascar morons believe – that the ghost of Davey Crockett will leave a jug of liquefied “dark matter” under everyone’s Christmas tree this year or next, guaranteed to keep the engines ringing until Elvis ushers in the Rapture.

The educated folks – that is, the ones subject to the grandiose story-lines of techno-triumphalism taught in the universities – are sure that we’ll either invent or organize our way out of the current predicament. A society that put men on the moon in 1969, the story goes, will ramp up another “Apollo Project” to keep things going here. One wonders, of course, what they mean by keeping things going. Even if it were hypothetically possible to keep all the cars running forever, would it be good thing to make suburban-sprawl-building the basis of our economy – because that’s the direct consequence of perpetually cheap energy. Has anyone noticed that the housing bubble and subsequent implosion is following the peak oil line exactly?

And he's just warming up to the subject. Is he talking about us?

-- Ed Carlevale